The fact nearly all of Australia’s top CEOs are receiving these performance bonuses shows performance pay is more about rewarding conformity and discipline than risk-taking and entrepreneurship.

A more plausible explanation is that we simply reward executives for not stuffing up. Their customer base is growing in line with population growth and their prices are rising faster than their cost of production, which means profits rise without too much effort.

Not keeping up with change

According to Energy Australia, its CEO Mark Collette (base salary over $1 million) recently challenged a room full of other well-paid leaders at Australian Energy Week to continuously ask themselves: “Will this make energy cheaper?”

While it is clear Energy Australia’s spending on carbon credits did nothing to make the company’s energy cheaper, it is not yet clear if the board will award a “performance bonus”.

Leading the world — in pay packets

The vice chancellors of Australian universities are among the best paid in the world, with over a dozen Australian earning more than the head of Cambridge University.

And while Australian vice chancellor pay has been soaring, Australian universities have been slipping steadily down international rankings for university quality.

Inequality is rising

Universities have seen a notable decline in academic staff per student while the gap between the pay of lecturers and vice chancellors has skyrocketed.

Inequality in Australia is rising. As long as CEO pay is rising faster than the minimum wages, that gap will continue to widen. The latest data showed CEO salaries are 55 times that of the average worker.

Just doing their job